Medicare Advantage is an alternative way to get your Medicare coverage

Medicare Advantage (also called Part C) is a way to receive your Medicare benefits through a private insurance company instead of through Original Medicare. The federal government pays the insurance company a fixed amount each month to cover your care. You still pay your regular Medicare Part B premium to the government, but you also pay the insurance company's premium, which varies by plan and can be zero.

The main difference from Original Medicare is that Medicare Advantage plans bundle hospital, doctor, and prescription drug coverage into one plan. You do not buy these separately. Most Medicare Advantage plans also include dental, vision, or hearing coverage that Original Medicare does not offer. However, you must use doctors and hospitals in the plan's network, except in emergencies.

Medicare Advantage plans are offered by private companies like UnitedHealthcare, Humana, Anthem, and Aetna. The plans available to you depend on where you live — not all companies offer plans in all areas. You can only join a Medicare Advantage plan during your Initial Enrollment Period (when you first become may be able to access for Medicare) or during the Annual Enrollment Period (October 15 to December 7 each year).

Key Takeaways

  • Medicare Advantage combines hospital, doctor, and prescription drug coverage into one plan run by a private insurance company, and most plans include dental, vision, or hearing benefits.
  • You pay a monthly premium to the insurance company in addition to your Medicare Part B premium, though some plans have zero premium.
  • You must use doctors and hospitals in the plan's network for non-emergency care, and out-of-network care is usually not covered.
  • You can join or switch Medicare Advantage plans only during your Initial Enrollment Period or the Annual Enrollment Period (October 15 to December 7).
  • Each plan has different out-of-pocket costs, deductibles, and copays, so comparing plans in your area is necessary to find the lowest cost option for your situation.

How costs work in Medicare Advantage plans

Medicare Advantage plans have different cost structures than Original Medicare. Instead of paying a percentage of the cost after you meet a deductible (as you do in Original Medicare), you typically pay a copay for each doctor visit or service. A copay is a fixed dollar amount — for example, $15 for a primary care visit or $40 for a specialist visit.

Every plan has an annual out-of-pocket maximum. Once you reach this limit in a calendar year, the plan pays 100% of your covered services for the rest of that year. Out-of-pocket maximums vary widely — some plans have a maximum of $5,000 and others $7,000 or higher. This maximum does not include your monthly premium.

Prescription drug coverage is included in your Medicare Advantage plan, not purchased separately. However, you still pay copays for medications, and the copay amount depends on which tier the drug is on. Tier 1 drugs (usually generic) cost less than Tier 4 drugs (usually brand-name). Some plans also have a deductible you must meet before drug coverage begins.

Plans that have zero monthly premium still have copays and out-of-pocket costs. A zero-premium plan may have higher copays than a plan with a monthly premium. You need to compare the total cost — premium plus copays plus out-of-pocket maximum — not just the premium alone.

Network requirements and how they affect your care

Medicare Advantage plans operate on a network model. This means the plan has contracted with specific doctors, hospitals, and other providers. You must use in-network providers for non-emergency care, or you will pay much more or the plan will not cover the service at all. Some plans allow out-of-network care but charge you a higher copay or coinsurance.

Before you join a plan, you should check whether your current doctors are in the network. Most plans provide a searchable provider directory on their website or by phone. Call the plan and ask: "Is Dr. [name] in your network?" and "Is [hospital name] in your network?" If your doctors are not in the network and you want to keep seeing them, that plan may not be right for you.

If you need emergency care, you can go to any hospital, even out-of-network, and the plan will cover it. However, once you are stabilized, the plan may transfer you to an in-network hospital. If you travel outside your plan's service area, emergency care is covered, but routine care is not.

Some Medicare Advantage plans are HMOs (Health Maintenance Organizations) and require you to choose a primary care doctor who coordinates your care. Other plans are PPOs (Preferred Provider Organizations) and give you more flexibility to see specialists without a referral. PPO plans usually have higher premiums and copays but more freedom in choosing providers.

Prescription drug coverage in Medicare Advantage

All Medicare Advantage plans must include prescription drug coverage (Part D). You do not buy a separate Part D plan. The drugs covered and the copays you pay depend on the specific plan you choose. Each plan publishes a formulary — a list of covered medications — that you can review before joining.

Drugs are organized into tiers, usually four or five levels. Generic drugs are almost always on Tier 1 and cost the least. Brand-name drugs are on higher tiers and cost more. Some plans cover brand-name drugs only if you have tried the generic version first and it did not work for you. This is called step therapy.

If a drug you take is not on the plan's formulary, you have options. You can ask your doctor to request an exception from the plan, explaining why you need that specific drug. The plan must respond to the request within 72 hours. You can also switch to a different Medicare Advantage plan during the Annual Enrollment Period if your current plan does not cover a medication you need.

When to choose Medicare Advantage instead of Original Medicare

Medicare Advantage may be a better choice if you want dental, vision, or hearing coverage included, since Original Medicare does not cover these services. It may also be better if you prefer predictable costs — knowing your copay in advance rather than paying a percentage of the bill.

Medicare Advantage can be less expensive if you are generally healthy and do not need many doctor visits or specialist care. Plans with zero or low premiums can save money on monthly costs. However, if you have multiple chronic conditions and see many specialists, the copays can add up quickly.

Medicare Advantage is not a good fit if you travel frequently outside your plan's service area, because routine care outside the network is not covered. It is also not ideal if you have a strong preference for specific doctors or hospitals that are not in any local plan's network.

You can switch from Original Medicare to Medicare Advantage, or from one Medicare Advantage plan to another, during the Annual Enrollment Period. If you switch back to Original Medicare after being in Medicare Advantage, you may have a gap in prescription drug coverage unless you join a standalone Part D plan within 63 days.

How to compare Medicare Advantage plans in your area

The Medicare Plan Finder tool on Medicare.gov lets you enter your zip code and see all Medicare Advantage plans available where you live. For each plan, you can see the monthly premium, deductible, copays for common services, the out-of-pocket maximum, and which doctors and hospitals are in the network.

To compare plans effectively, make a list of the doctors you see regularly and the medications you take. Then check each plan's provider directory to confirm your doctors are in-network. Check the formulary to confirm your medications are covered and at what tier (copay level). Calculate the total cost for a year: monthly premium × 12, plus estimated copays based on how often you see doctors and fill prescriptions.

You can also call each plan directly to ask questions. Plans are required to have customer service representatives available. Ask about coverage for specific services you use, such as physical therapy or mental health care. Ask whether there are any waiting periods before coverage begins or any restrictions on certain treatments.

If you are unsure which plan is best, you can contact your State Health Insurance information Program (SHIP). SHIP is a free counseling service that helps seniors understand Medicare options. You can find your local SHIP by calling 1-800-MEDICARE or visiting Medicare.gov.

What happens if you change your mind after joining

If you join a Medicare Advantage plan and decide it is not right for you, you have limited time to switch. During your first three months in a Medicare Advantage plan (your Initial Enrollment Period), you can switch to a different plan or go back to Original Medicare without penalty. After three months, you can only switch during the Annual Enrollment Period.

If you switch back to Original Medicare after being in Medicare Advantage for more than three months, you lose your prescription drug coverage when ready. You must join a standalone Part D plan within 63 days, or you will pay a late enrollment penalty for as long as you have Medicare. The penalty is 1% of the national average Part D premium for each month you were without coverage.

Some people switch to Medicare Advantage and then realize their doctor left the network or the plan changed its coverage. If this happens outside the Annual Enrollment Period, you may be able to make a change if you have a may have access to life event, such as moving to a new area or losing your current coverage. Call Medicare at 1-800-MEDICARE to ask whether your situation qualifies.

Frequently Asked Questions

Do I have to join a Medicare Advantage plan?

No. Medicare Advantage is optional. You can stay on Original Medicare instead. However, if you do not join a Medicare Advantage plan or a standalone Part D plan when you first become may be able to access for Medicare, you may pay a late enrollment penalty for as long as you have Medicare.

Can I use my Medicare Advantage plan if I travel?

Emergency care is covered anywhere in the United States. Routine care outside your plan's service area is usually not covered. If you travel frequently or spend part of the year in another state, ask the plan whether they have out-of-area coverage or whether you can see out-of-network providers at a higher cost.

What is the difference between an HMO and a PPO Medicare Advantage plan?

An HMO requires you to choose a primary care doctor and get referrals to see specialists. A PPO lets you see specialists without a referral and gives you more flexibility. PPO plans usually have higher premiums and copays but more freedom in choosing providers.

Can my Medicare Advantage plan change during the year?

Yes. Plans can change their premiums, copays, deductibles, and provider networks at any time, though they must notify you in advance. If your plan makes changes that affect you significantly, you may be able to switch to a different plan outside the Annual Enrollment Period. Call the plan or Medicare to ask.

What if my doctor leaves the Medicare Advantage plan's network?

If your doctor leaves the network, the plan must notify you. You can then switch to a different Medicare Advantage plan or go back to Original Medicare, even outside the Annual Enrollment Period. This is considered a may have access to event. Contact the plan or call 1-800-MEDICARE to make the change.